Globalisation in Ecuador

Topic: EconomicsEconomic Concepts
Sample donated:
Last updated: June 14, 2019

Globalisation in Ecuador Introduction Globalisation is “the process enabling financial and investment markets to operate internationally, largely as a result of deregulation and improved communications”.

In other words. It is the process of increasing the connectivity of the world’s markets and businesses. In the last two decades this process has had a huge impact around the world.

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For example, as technology advances make it easier for people around the word to travel, communicate and do businesses around the world. Ecuador’s BackgroundEcuador is a democratic republic in South America, bordered by Colombia on the north, Peru on the east and south, and by the Pacific Ocean to the west. Main spoken language is Spanish. However, the Native Indian Ecuadorians have their own language which is “Quichua”. Ecuador’s economy has heavily depended on exporting resources such as petroleum, fish, shrimp, timber and gold. In addition, it has rich agriculture: bananas, flowers, coffee, cacao, sugar, tropical fruits, rice, roses, and corn. Ecuador’s population according to the last census is of 14 million and has an area of 272,046 km2 (105,038 sq.

mi).Its capital city is Quito, which was declared a World Heritage Site by UNESCO in the 1970s for having the best preserved and least altered historic centre in Latin America. However, the biggest city in Ecuador is Guayaquil and it is where all the Economic system of the country is controlled. International Business in Ecuador. There are excellent financial opportunities in Ecuador for commercial and foreign investors. The major businesses to be considered are: telecommunications, mining, energy programs, highways, oil, fishing, tourism as well as eco/ethno tourism, pharmaceuticals and financial services.Ecuador is a good country to do commercial business because it also has a Democratic Government and four major characteristics of advantage for international business in Ecuador: 1.

International Trade/Free Zone: a. Free trade zones with Andean Neighbours 2. Financial Benefits: b.

Investors are entitled to transfer abroad, in freely convertible foreign currency their net returns from their international investments without limits, taxes, liens or encumbrances. c. Free access to stock market and national finance system to obtain credit lines.Prices are set by the market with little Governmental intervention.

3. Labour Benefits: d. A large number of medium and higher- skilled employees available 4. Guarantees: e. Investment guarantees for US investors are provided by the Overseas Private Investment Corporation (OPIC).

Globalisation’s positive and negative impacts in Ecuador * Positive Impacts: * First, improving the quality of life. Globalisation has improved many aspects. For example: Education and Medicine. * European interests for business agreements, world trade. Opportunity to enter the global market by importing and exporting goods.

* Improve of technology. * Rising Economy. * Negative Impacts: * People believe that opening our market to the world could bring a serious low demand on country products because population would prefer foreigner products. * Terrorist have access to sophisticated weapons and to communicate via Internet. * Local industries are being taken over by foreign multinationals. Analysis There are no doubts that Globalisation have been more positive than negative in Ecuador when it comes to analyse and criticism International Business.

Ecuador has emerged in the world by itself thanks to the huge numbers of relevant sources Ecuador possess like: Oil, shrimp, bananas, cacao, rice, roses, gold, etc. However, this doesn’t mean Ecuador should not adopt Globalisation. If we look on the past, around 1998 Ecuador suffered a very devastating nature event which was “El Nino”. A warm current of water, is a temporary change in the climate of the Pacific Ocean, in the region around the equator. You can see its effects in both the ocean and atmosphere, generally in Northern Hemisphere winter.

The ocean surface warms up by a few degrees Celsius making huge thunderstorms. Ecuador had to deal with such phenomenon that destroyed most of Ecuador’s Agriculture farms and products. It was a very tough time for the farmers and the country’s economy itself. Ecuador’s Economy by 1999 was pretty much on the floor and the only way to keep the country going was by keep being on debt with the United States of America. In the year 2000 Ecuador’s Government at the moment, Jamil Mahuad, have decided to dollarized the country in order to get bring more opportunities to the country.Ecuador have lost their currency and implanting the dollar since that year until now. People were not agreed with it but by doing that we were able to get ourselves off debt and start implanting globalisation in Ecuador and developed our country more.

After all these events Ecuador had the opportunity to see by their own selves how good and prosperous was to implant Globalisation. Globalisation has helped to break the barriers that used to exists with our neighbours and other countries around the globe to exchange goods and services. Ecuador has gained a huge value around the world for their products.For example, if you go to America you can see that most of their shrimp and bananas come from Ecuador. Nowadays, Russia is the biggest buyer for Ecuador’s Bananas farmers.

These and more examples of the world market trade that Ecuador is doing today are a great example how good Globalisation is. We didn’t have these opportunities before that is why our country suffered a big crisis for many years. Globalisation has attracted international multinationals to come to Ecuador to establish business immensely. The biggest profitable international company today in Ecuador is “Claro”.Claro is a telecommunicating company own by no other than the world’s richest man in the world, Carlos Slim. Mr, Slim saw an open window many years ago in Ecuador, he saw how the country was developing fast and how people would be interest to have a better telecommunicating company established in order to have a better services and more opportunities such as bringing Internet and mobile technology together at the same time. Nowadays we can see how useful technology is around the globe to make business and to keep in touch, as people said “Communication as been a great assistant in bringing people and countries together”. Education and Medicine have developed immensely.

A lot of foreigner education has been implanted in Ecuador. High Schools and Universities from America have established themselves in Ecuador in order to help to provide a better Education to people. The opportunity to immigrate to a foreigner country to study a language or get a degree had become more easy and possible.

Ecuador’s Education system has improved itself in general because of the better knowledge and perspective people have about the world. Medicine has tremendously increased in Ecuador.Globalisation gives the opportunity to bring technology and by that Ecuador can count nowadays with so many sophisticated machines and instruments that were no available before to practice a better medicine for the society. However, there are a couple negative aspects of globalisation in Ecuador. Since we have opened up our borders with neighbours and foreign countries some of our local companies have been bought or taken over by foreign multinationals. These has made the local employees to get angry at government for making it so easy for abroad companies to established in Ecuador and take over the market.Ecuadorian employees and owners of companies believe they are threat by foreign companies because the population believes and trust foreign products and services are very quality and more efficient than national products and services. Another negative impact is that now that globalisation exists in our country and we have opened up borders with neighbours like Colombia there is a high risk of terrorisms from Colombia (la Guerrilla) starting to establish around Ecuador in order to have a better control a way to deal with the drug dealing market they have to transport cocaine around the world.

Recommendations Ecuador has to keep showing to the world that they are capable to keep offering and promoting the services and products they possess by doing that investors from around the world can keep feeling attract to the market and therefore Globalisation keeps expanding. Taxation should keep on lower bases to help business from around the world continue joining our market. By this foreign business and companies could expand more easily around the country and that would help a lot to increase employment and work labour.The Government should implant a better regulation to balance the equality opportunities for Local companies and businesses over foreign companies and business investors. Ecuadorians are feeling that the government making it too easy on foreign investors to do business in Ecuador and these are taking over on the market and no leaving room for the local businesses to maximize their profits as they wish.

Conclusion Ecuador is ranked Number 89 in the world with a globalisation index of 56. 91.In order to keep growing as a globalized country, Ecuador’s businesses should not try to compete with foreign businesses but try to joined them and take globalization as an advantage.

Ecuador most adapts and tries to use other countries’ economies as a role model to follow. Take for instance the USA and China; both are world’s power forces of production and distribution of goods and services. It will help a lot for companies to know how to control and supervise operations more efficient.

In the other hand, the non-educated workers of the country could eventually improve their skills and learn more from this role models and that’s a very efficient way to keep growing for their local small businesses in the country. By having a globalized market there is no hurry or requirements or even more pressure for businesses and locals to do everything themselves. They can take this advantage to adapt and work together for a better future and a better will.

References Bureau of Western Hemisphere Affairs Background note: Ecuador. Retrieved November 29, 2011, from U.S Department of State: http://www. state. gov/r/pa/ei/bgn/35761. htm Theguardian: What is Globalisation? (2002) Retrieved November 30, 2011, from http://www. guardian.

co. uk/world/2002/oct/31/globalisation. simonjeffery International Commerce in Ecuador Retrieved November 30, 2011, from http://bestofecuador.

com/inter. htm Experimental Climate Prediction Centre (1997). Retrieved November 28, 2011, from http://meteora. ucsd. edu/~pierce/elnino/whatis. html The effect of dollarization in Ecuador.

Retrieved December 1, 2011, from http://www. mindspring. com/~tbgray/dollar. htm

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